SaaS
(software as a service) is spelled with two capital S's. The first refers to
software and is the one we commonly think of. It references the need in companies
to find economical cloud-based solutions for running their software. However, it
is the second "S" which stands for service that promises to become a more significant
differentiator for SaaS providers as the industry matures.

I can
reflect on my own experiences as a former SaaS manager. Configuring the data
center, developing the product, and securing clients was one thing—but
retraining an IT staff that was used to serving internal users and not outside
customers was another. In short, we had a lot to learn about service.

The
memories flooded back during a recent conversation I had with Bill Gardner,
Infrastructure Architect for Oildex, a
SaaS financial services provider for the oil and gas industry.

"My
entire career has been spent in the SaaS world, and customers always had very
high expectations," said Gardner. "But it didn't change the fact that we initially
had some growing here to do in the area of what was expected of customer service
from our IT staff. In IT, you hire many individuals who are coming from an
internal IT organization and dealing with co-workers. What they learn when they
enter a SaaS environment is that there are other service considerations when
you are dealing with outside customers and their data—especially if the data is
financial in nature."

Gardner—and
Oildex—believe that service is an integral part of the value proposition that
SaaS providers should be delivering to their clients. The company actually inserted
its own "teeth" into its SLA for service, without clients having to ask for it
first.

"We
wanted our service SLA to reflect our belief in service," said Gardner. "In
other words, if we didn't meet our service commitment to our customers, we committed
that we would pay them in the form of rebate credits that would be applied to
future billings."

This is
how the system works:

Oildex currently
promises a minimum of 99.95 percent uptime to its clients. However, if it ever fails
to meet this level, it rebates "penalty credits" to clients that are reflected
on their next bills.

"We've
always believed that service was an important part of what we deliver," said Gardner.
"We also recognize that for clients to go with us, they need to develop a trust
in what we do."

Oildex takes
several other steps to ensure high-grade customer service:

It
regularly performs audits that clients require as documentation for their own
internal and regulatory audits; and

It
sends out its sales force to personally visit with clients twice per year to
discuss service levels and product enhancements that clients would like to see.

"The client
visits have really made a difference," said Gardner. "For a time, we were encountering
some system performance issues that were due to old code that was running
inefficiently, and that we subsequently fixed. The problem was a direct result
of rapid growth in clients and transactions—because we didn't actually
encounter the issues until transaction volumes reached a certain level."

Oildex
renovated its code and has since seen dramatic improvements in systems performance
that passed directly to its clients.

"What we
do is all about great service, and we understand that," said Gardner—who also
said that the company had recently hired a support manager from the retail
industry who brought the service culture message to the organization. "In retail,
the customer is always number one. We continue to bring that mentality into
Oildex," said Gardner.

It's a heartening
message, given 2013 survey results on SaaS performance as seen through the eyes
of SaaS customers. A

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About Mary Shacklett

Mary E. Shacklett is president of Transworld Data, a technology research and market development firm. Prior to founding the company, Mary was Senior Vice President of Marketing and Technology at TCCU, Inc., a financial services firm; Vice President o...

Full Bio

Mary E. Shacklett is president of Transworld Data, a technology research and market development firm. Prior to founding the company, Mary was Senior Vice President of Marketing and Technology at TCCU, Inc., a financial services firm; Vice President of Product Research and Software Development for Summit Information Systems, a computer software company; and Vice President of Strategic Planning and Technology at FSI International, a multinational manufacturing company in the semiconductor industry. Mary is a keynote speaker and has more than 1,000 articles, research studies, and technology publications in print.